After costing an estimated $6 billion dollars, and with criminal investigations pending for the two ex-employees who orchestrated it, the “London Whale” debacle is unquestionably a matter that mega bank J.P. Morgan Chase would like to put to bed. But Federal regulators are saying, in essence, “not so fast.”

Despite having already agreed to pay the SEC $920 million in fines directly relating to the scandal, J.P. Morgan’s employees are now facing additional questioning and potential civil action from federal regulators.

According to the SEC, pursuing those involved with the scandal was the first step, but that doesn’t mean J.P. Morgan is off the hook. According to an SEC statement, “subsequent action against JPMorgan faults its internal controls for failing to ensure that the traders were properly valuing the portfolio, and its senior management for failing to inform the firm’s audit committee about the severe breakdowns in CIO’s internal controls.” The report goes on to say that the investigation will continue.

Fortunately for J.P. Morgan, the investigation will target those directly responsible for the security and compliance lapses at the heart of the scandal. Executive level management will not face investigation in the immediate future. “Our counsel has had discussions with the SEC staff and the staff has informed us that based on the evidence now known to them, they do not anticipate recommending any actions against our CEO,” a J.P. Morgan spokesman told TheWall Street Journal.

Responding to the settlement and the news of continued investigation, Jamie Dimon, CEO of J.P. Morgan Chase, said in a statement, “We have accepted responsibility and acknowledged our mistakes from the start, and we have learned from them and worked to fix them. Since these losses occurred, we have made numerous changes that have made us a stronger, smarter, better Company.”

In addition, Dimon said earlier this week that the reevaluation of compliance practices was of utmost importance to the bank.

All this comes as another case against the bank regarding credit card marketing practices resulted in a settlement of an additional $20 million, placing the company’s regulatory action tab for the week at over a billion dollars. You could buy quite a bit of humble pie for that much.

Executive Editor

Chris DiMarco

Chris DiMarco, Executive Editor of InsideCounsel magazine, has a background in multimedia production with previous involvement in projects in which he developed and created content...